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The $5.6B Business of the Golden State Warriors
Golden State Warriors or Silicon Valley Warriors?
Last night, the Golden State Warriors played in their 6th NBA finals in the last 8 years.
Since Steph Curry was drafted in 2009, the valuation of the Golden State Warriors has skyrocketed from $335M to over $5.6B — an increase of 1,572%.
Winning brings great things — including a lot of money and growth opportunities.
The team’s President and Chief Operating Officer, Brandon Schneider, has even said that the Warriors are much more than a basketball organization.
“Disney started as a theme park. The Warriors started as a basketball team. Look at what Disney has become, and look at what the Warriors are becoming.” Schneider told CNBC.
The future looks bright….
But things weren’t looking that hot in 2010 when the Warriors got acquired by venture capitalists for $450M — it was deemed wildly excessive for a losing team at the time.
Let’s dive in 👇
The Revamped Warriors
Harbored right in the midst of Silicon Valley, it made sense when a group of venture capitalists, led by Joe Lacob and Peter Guber, acquired the Golden State Warriors.
Lacob was a minority owner of the Boston Celtics for five years before selling to buy the Warriors.
Their incredible success over the last 12 years is often credited to the ownership group which created a business that is unlike your traditional sports team.
They’ve built similarly to a Silicon Valley Startup:
1. Hire based on potential, rather than track record.
If you have an idea for a whole new business that doesn’t yet exist, think Google or Uber, there aren’t any people to hire that have already done well in that category, as it’s brand new.
You have to interview and hire them based on their intelligence, experiences, and potential.
The Warriors hired a general manager who used to be an agent and hired a head coach, Mark Jackson, who had never coached.
2. Mediocre isn’t good enough.
In the startup world, one person can take the company to a certain level, but you may need to bring in someone else who can take it the rest of the way.
The Warriors had become relatively successful under Mark Jackson, winning 51 games in a season, yet they fired him and hired another coach who'd never done it before, Steve Kerr.
3. Adjust based on your strengths.
Steph Curry is the Warriors best player. Management brought in Steve Kerr to help develop a complementary team around Curry that played the game on the perimeter.
An undersized big man like Draymond Green was rare before the Warriors drafted him in 2012.
4. Be open to all ideas
Majority owner Joe Lacob prides himself on being open to all ideas and giving everyone a voice. This has seeped its way throughout the organization.
After their 2015 NBA championship, Steve Kerr publicly gave credit to video coordinator Nick U’Ren who suggested Andre Iguodala replace Bogut in the lineup after game 3.
The Warriors would go on to win every game in the series there-after and become NBA champs.
After all their success in recent years, an array of teams have tried to be more like the Warriors on the court and in the front office.
But it’s going to be hard to replicate such an innovative club.
The Warriors Are More Than a Hoops Team
As noted, the Warriors are valued at $5.6B billion — which is up from $3.5B before the pandemic.
They are projected to eclipse $700 million in revenue this year and could soon pass the New York Knicks ($5.8B) as the most valuable NBA franchise.
Let’s take a deeper look at what’s driving their growth:
The Warriors moved into the $1.4 billion Chase Center in San Francisco two years ago, and have since monetized the surrounding real estate and maintained a tenant and equity partner in Uber.
The Warriors’ $20M patch deal with Rakuten expires in 2023. It’s unclear if the Warriors are seeking a renewal, but given that the Brooklyn Nets have a league-high $30M deal for its patch with WeBull — it’s safe to assume the Warriors will get more than that.
The club has a new cash stream in the recently launched Golden State Entertainment (GSE), which will create in-house content in a partnership with Mandalay Entertainment.
Most importantly, GSE aligns the Warriors with future licensing revenue from streaming giants like Apple, Amazon, Netflix, and more.
In February, the Warriors launched SuiteXchange, a ticket exchange platform for luxury suites inside the Chase Center. It leverages blockchain technology and allows the team to capture data and transaction fees.
The team has also surpassed $2 million in NFT sales and agreed to a $10 million global sponsorship deal with FTX.
As long as the Warriors stay creative, keep basketball as the main focus, and continue to innovate there is no end in sight for their growth.
Silicon Valley Athletes
The Warriors have the highest payroll in the NBA, spending more than $180 million on its 2021-22 roster.
But even more impressive, the players help circulate the money back into Silicon Valley through personal investments or funds.
Here are four prime examples of Warriors players taking advantage of their time in San Francisco.
Andre Igoudala helped start the trend a decade ago — then Kevin Durant and Steph Curry used his mentorship as a liftoff into the VC world.
Draymond Green has since joined the Warriors internal investing competition, even once saying that he and KD compare portfolios.
The new era of athlete-investors has arrived.
As I continue to build out The Petcash Post platform, the “business of athletes” will stay at the forefront.
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Thanks for reading today!
Have a great weekend — we’ll talk on Sunday.